Robert Hoban one of the leading light lawyers in the cannabis & hemp space has written a state of play report on cannabis & hemp regulations in Canada as we move toward a fully regulated market mid 2018.

He writes, As Canada moves towards legalizing cannabis for adult use, the government is in the process of setting up new regulations for adult-use cannabis, medical cannabis and hemp. These regulations are complicated, and they also will impact Canadian cannabis exports and international investment opportunities.

Of most interest to GHG readers will be the following hemp section

Hemp in Canada

There are many varieties of the cannabis plant, and hemp, also called industrial hemp, refers to the varieties of Cannabis sativa L. which typically contains less than 1 percent tetrahydrocannabinol (or THC). Although cannabis is a controlled substance in Canada, there are exceptions, including medical cannabis use and industrial hemp, under the Industrial Hemp Regulations (IHR).

The IHR defines Industrial Hemp as “the plants and plant parts of the genera Cannabis, the leaves and flowering heads of which do not contain more than 0.3 percent THC”, and permits certain activities with respect to hemp for commercial purposes through a licensing system. However, current licenses granted under the IHR expire in the calendar year they are issued.

Under Canada’s proposed new cannabis regulations, every license or authorization issued under the IHR prior to the commencement date of Bill C-45 will be deemed to be a license issued under Section 62 of that law. According to the draft regulations, non-viable seed, mature stalk without any leaf, flower, seed or branch fall outside the scope of the adult-use law, and therefore no license would be required for processing or sale, or for the sale of any derivatives of seed and grain containing 10 micrograms/grams THC.

The IHR applies to the importation, exportation and possession of industrial hemp and its production, sale, provision, transport, sending or delivering. The IHR does not apply to the importation, exportation, sale or provision of whole industrial hemp plants, including sprouts, or the leaves, flowers or bracts of those plants, or their derivatives, or any derivative of seed, viable or non-viable seed, or products from that derivative, if the derivative or product contain more than 10 micrograms/gram THC.

Both Canada’s Controlled Substances Act and the IHR do not apply to the importation, exportation or wholesale sale of a derivative of seed, viable grain or non-viable cannabis seed, or a product made from that derivative, if not made from whole industrial plants (including sprouts, leaves, flowers or bracts of those plants). The laws also do not apply to an industrial hemp derivative or product that has 10 micrograms/gram THC or less, labelled as such, and accompanied by a certificate of THC from a trusted laboratory. An example of such a derivative or product that the Controlled Substances Act or IHR would not apply to may be hemp seed oil and flour with less 10 micrograms/gram THC or less.

Under the proposed regulations for Canada’s adult-use cannabis market, industrial hemp would be defined as “cannabis plants whose leaves and flowering heads do not contain more than 0.3 percent THC,” and similar to the micro-license framework for non-medical cannabis, industrial hemp licenses will be permitted to possess, transport, research and sell industrial hemp leaves, flowers and branches (or the whole plant).

The regulations will also modify existing physical security requirements for industrial hemp licenses and begin treating industrial hemp storage as any other agricultural product. This includes a proposal to remove a current IHR requirement that industrial hemp be stored in a locked container or location, or premises to which only authorized persons have access.

Currently, industrial hemp licences authorize the cultivation of industrial hemp from approved varieties from pedigreed seeds, those that have been confirmed to consistently produce less than 0.3 percent or less THC. The benefit of using approved pedigreed seeds is that these licensees would be permitted to bypass the lab THC testing requirement. Lab testing would remain mandatory for those Industrial Hemp licensees under the new regulations who do not use pre-approved pedigreed seeds to confirm THC content.

AG Capital Press reports that Washington’s state-run hemp program received yet more financial help from lawmakers to survive for another year even though last year’s biggest hemp planter warns against cultivating more acres than the market can handle.

Capital Press reveals that Washington legislators tucked $100,000 to market hemp and license farmers and processors into a new state budget passed March 8. The amount is less than half the $287,000 department requested, but ensures Washington remains among the states trying to build a hemp industry.

The department is discussing exactly what it can do with the money and has not set a timetable for issuing and renewing licenses, an agency spokesman said Tuesday.

The state’s hemp program, a necessity to stay within federal law, has been on hold since late last year. The agriculture department said it couldn’t continue overseeing hemp unless lawmakers appropriated funds to augment license fees.

Bonnie Jo Peterson, founder of the Industrial Hemp Association of Washington, said that she found lawmakers still backed hemp.

“Across the board, the reception was positive,” she said. “On both sides of the aisle and both sides of the mountains, there is support of hemp.”

Cory Sharp, who cultivated about half the 180 acres of hemp grown in Washington last year, said Tuesday that he will forgo planting this year. He said his company, HempLogic, was too busy developing a mobile hemp processor in partnership with a Colorado equipment maker. He said he has plans to take the decorticator to about 20 states.

A license to grow hemp in Washington costs $750, including an application fee. Oregon has a grower registration fee of $1,300.

Peterson also said Washington could make hemp more attractive by allowing the production of cannabinoid, commonly known as CBD, an oil marketed as a nutritional supplement. CBD is widely available, though the Drug Enforcement Administration maintains it is illegal.

The department issued seven one-year licenses to grow or process hemp before suspending the program. Two licenses went to Washington State University researchers and two went to tribes. The department reported collecting $8,139 from license holders, while spending $146,000 on oversight.

Last summer, the hemp world was rocked by news of a series of raids performed by Indiana State Excise Police on retailers of cannibidiol (CBD) products. After meetings with US Hemp Roundtable attorneys, the police returned the products to the shelves and promised no more law enforcement actions. However, the state’s Attorney Generalopined that CBD sales were illegal.

The public outcry that resulted from the raids mounted. Politicians listened. And an aggressive legislative lobbying campaign led by Roundtable board member CV Sciences and local Indiana hemp activists resulted in overwhelming votes for CBD legalization in the House and Senate.

Late last night, a compromise version, Senate Bill 52, passed the House unanimously and the Senate by a 3 to 1 margin. The Governor is expected to sign the bill into law shortly.

This is the latest published version we’ve been able to find online as of 15 March 2018

As a result, Indiana will become one of the first states to explicitly legalize hemp-derived CBD for retail sale. (Hemp-derived CBD, of course, already has strong legal protections – read more here.)

As with much of the sausage-making process which is politics, Senate Bill 52 is not perfect. Most concerning is a potentially burdensome provision that requires after July 1 that product packaging include a bar code or a QR code that, when scanned, provides information on the product’s content, including THC testing. While CV and many strong pro-hemp legislators fought to exclude this provision, the Senate sponsor, powerful Judiciary Committee Chairman Michael Young, insisted on it, and would have otherwise killed the bill.

However, as discussed more in this article, the bill requires the legislature to come back this summer and study hemp and hemp products more generally – we believe this will result in fixing this issue, and even stronger legislation down the road.

Despite Senate Bill 52 not being everything the industry wanted, this is an important step – a conservative state, filled with anti-marijuana legislators, overwhelmingly passed legislation to legalize the retail sale of CBD – mostly because they knew if they didn’t, their constituents would be furious. This offers tremendous optimism for the future of the hemp movement.

Wisconsin public radio has reported that industrial hemp licensing applications are now available for the state’s research pilot program.

The WI Department of Agriculture, Trade and Consumer Protection is accepting applications with a May 1 deadline.”

The report reveals

The U.S. Congress included a provision in the 2014 farm bill allowing states to do hemp research programs. Wisconsin’s legislature asked DATCP to put a rule in place setting up the pilot program. Department spokesperson Donna Gilson says this isn’t like growing corn or soybeans

. The federal government still views hemp as a controlled substance, requiring the farm field to have a GPS coordinate given to local law enforcement along with a background check of the farmer. Anyone with a drug conviction is ineligible.

She says there are restrictions on sale, as well…

“….One of the things that we want people to be aware of is that you’re not going to be able to decide at the end of the growing season where your going to sell your hemp to get the best price. You’re going to have to have a market lined up for your hemp before you put the seeds int the ground. If not, you may be stuck with a crop you can’t sell….”

The plants have a limit of 0.3 percent THC. Hemp has the active ingredient in it’s related plant marijuana, but at much lower levels than the illegal plant. The federal government made industrial hemp illegal because of it’s related to marijuana.

Industrial hemp was a major crop in Wisconsin through World War II, harvested for its fiber to make rope. Gilson says the modern markets are different…

“…these days the markets are more in food products, fibers for clothing or household goods, health and beauty products. It’s likely to be a very different market that it was in the 1940’s and ’50’s….”

Wisconsin Department of Agriculture, Trade and Consumer Protection sent this bulletin at 03/02/2018 08:30 AM CST

Industrial Hemp License Applications Now Open

MADISON – Industrial hemp licensing applications are now available for Wisconsin’s research pilot program, and the Department of Agriculture, Trade and Consumer Protection will begin accepting applications immediately. The deadline to apply for the 2018 growing season is May 1.

People who want to grow or process industrial hemp in Wisconsin will need to apply for a license, and at the same time, register their intentions to grow or process hemp in the state this year. They can do both online, or download printable forms, at datcp.wi.gov.

“We know that many Wisconsin farmers see a great opportunity here,” said Brian Kuhn, director of the department’s Bureau of Plant Industry. “As we’ve been telling them all along, they need to remember that this is a research pilot program. Growers really need to know before planting that they have a licensed processor in position to accept their crop. They need to be aware of all the federal, state and local laws that might apply, and they need to talk to their lenders before they order seed.”

Congress included a provision in the 2014 farm bill to allow states to conduct research pilot programs into industrial hemp production, if authorized by their legislatures. The Wisconsin Legislature passed a law in November that directed DATCP to write an emergency administrative rule in 90 days. The rule sets up the regulatory framework for the pilot program.

That rule, called ATCP 22, is now finished and is effective March 2. The industrial hemp program it creates is based largely on those in the 31 other states with programs.

The law, as passed by the Legislature and signed by the Governor, requires that growers and processors pass a background check to show that the licensee has no state or federal drug convictions. Growers will pay a one-time licensing fee of $150 to $1,000, depending on how many acres they intend to plant. Processors will also need a one-time license, at no cost. Both will have to register with DATCP this year, and annually to remain in the program, with growers paying a $350 annual fee and processors, a $100 annual fee.

DATCP inspectors will sample plants from each field and variety grown, and take them to the department’s laboratory for analysis. The plants can contain no more than 0.3 percent THC. Growers will have reporting and recordkeeping requirements, and will be required to enter into a research agreement with DATCP.

Industrial hemp was a major crop in Wisconsin in the first half of the 20th Century, mainly harvested for its fiber to make rope. Hemp products today are very diverse, and are available in the United States, but have been largely made from hemp produced in other nations.

It’s official, Wisconsin farmers can now apply for a license to grow or process industrial hemp.

The Wisconsin Department of Agriculture and Trade Consumer Protection is now asking that farmers to do their ‘homework’ before growing the crop

IIt has also been revealed that all WI growers and processors must pass a background check and have no state or federal drug convictions.

Wisconsin is among 31 states where hemp farming is now regulated. The state legislature passed an industrial hemp bill last November, allowing Wisconsin to set up a pilot program.

“One of the challenges in getting a program put together in three months was that we had so many calls from people that were interested, and trying to answer those questions, which a lot of times we just didn’t have answers yet,” said Donna Gilson, Communications Specialist for the Wisconsin Department of Agriculture, Trade and Consumer Protection.

Farmers looking to grow or process industrial hemp need to apply for a license by the May 1st deadline this year, pay the fee, and register with the Department of Agriculture, Trade and Consumer Protection.

Growers need to also be ready for random inspections, and a sampling 30 days before harvest.

“They’ll need to notify us, and we’ll send an inspector out who will take samples of every field and if you have more than one variety they’ll take samples of every variety, and they’ll have to drive that back to Madison, the samples can’t be sent through the mail, and drive it to our lab here,” said Gilson.

Gilson says the state will work closely with local law enforcement letting them know where the licensed hemp fields are.

“Once we have determined that there is a low enough THC level, then we’ll issue a certificate, which has to accompany the hemp wherever it goes, and it would presumably go to someone who is going to process it as an ingredient some product, whether that’s processing it into fiber, into lotion, into whatever product they’re going to process it into,” said Gilson.

Global Hemp plans to use the proceeds to develop the Company’s New Brunswick hemp cultivation and extraction project.

A portion is also earmarked to fund due diligence on potential acquisitions. Global Hemp is contemplating purchasing land and water rights to develop a hemp cultivation and extraction facility in the State of Oregon.

About a quarter of the funds came from Global Hemp insiders at the company.

Global Hemp, founded in 2014, is headquartered in British Columbia, Canada. The company also has base operations in Montreal and Los Angeles.

Global Hemp’s Plans For 2018

Global Hemp is preparing for proposed changes to Canadian legislation expected to kick off in the summer of 2018, which will permit CBD extraction from industrial hemp.

The company is planning for a minimum of 125 acres of hemp cultivation in 2018, with hopes to increase that to 1,000 acres by year three of the project.

Global Hemp is currently considering sites in northeast New Brunswick to locate their processing facilities. In addition, discussions are underway regarding the purchase of extraction equipment. Global Hemp expects the facilities to be in place and operational for the 2018 harvest in October.

Donald Steinberg, CEO of Marijuana Company, said in a statement, “We are excited to complete the first phase of industrial hemp trials in Canada, and we look forward to continue expanding operations in Canada. Our joint venture with Global Hemp allows Marijuana Company the opportunity to expand the Company’s operations on an international level. Both Companies are excited about the endless possibilities for hemp derived CBD product this year in Canada.”